Press Release

15 March 2023

Government collects more than P380 billion a year from crude oil and petroleum products, a fraction of which can be used to finance the clean-up of the Mindoro oil spill and indemnify impacted coastal residents, House Deputy Speaker Ralph Recto said.

“Ang katas ng buwis ng langis dapat gamitin panglinis ng tagas sa lumubog na barko,” Recto said.

Recto said a mere one day’s worth of oil tax collections – P1 billion – would be enough to jumpstart “abatement and alleviation” measures in areas hit by the ecological disaster.

Recto said he is “gently reminding” government of its huge revenues from oil and fuel products “to goad it to spending more for the containment of the oil spill.” 

“Ang punto ko lang ay whatever you are spending is just a mere drop in the barrel of oil tax collections,” he said.

Recto believed that “if the treasury were an oil tank, then it is only correct to siphon off from its contents to address a situation for which one particular tax was meant to alleviate.” 

“Nature, when it is under threat, as in the case of the oil spill, is entitled to tax dividends,” he said.

Recto said an excise tax is slapped on oil products because it is viewed as a harmful product, causing pollution and sickness, and contributing to global warming.

“The argument was that it is paid to compensate for damages to health and the environment. 

That was how previous administrations framed their justification for higher oil taxes,” he said.

“So can this principle be invoked in the Mindoro oil spill? Can collections of this specific tax be spent for the contingencies used to justify its imposition?” Recto said.

Based on a study of a House of Representatives think-tank, the Bureau of Customs collected P372 billion in duties and taxes on crude oil (P138.9 billion) and petroleum products (P233.5 billion) in 2021.

The Bureau of Internal Revenue added P7.4 billion in excise tax from petroleum products during the same year.

The BOC gets the bulk in collections based on the “pay as you enter” principle when taxes on crude oil and refined products are collected upon landing in ports.